* This is my article in BusinessWorld on March 15, 2017.
The endless debate in mining is largely fueled by endless
myths and disinformation that fan more emotionalism than reason. Below are some
of these myths and the realities behind these half-truths.
1. Mining provides a small contribution to GDP, only P70
billion a year in gross value added (GVA).
Wrong. Mining GVA is P85 billion a year, average for 2010
to 2016. Also, the sectors gross value production is P166 billion a year,
average for 2010 to 2015. A large part of this is from large-scale corporate
mining while the reported contribution of small scale mining is very small,
only about P1 billion a year in 2013-2015.
2. The mining industry’s tax payments are small and almost
insignificant at only P3 billion a year.
Wrong. Total taxes, fees, and royalties paid by
large-scale mining is around P23 billion a year, the P3 billion a year is only
for the while the excise tax collections by the BIR. Small scale mining pay
zero to the BIR, they pay only little amount to the LGUs.
3. Employment share of mining is very small at only around
100,000 workers.
Wrong. From official figures, employment in the sector is
about 240,000. Excluded in the numbers are those that are indirectly hired like
communities that benefit from several social development and management program
(SDMPs).
4. Mining activities should be stopped since it results in
large-scale environmental damage while yielding minimum benefits.
Wrong. Aside from the national income and consumption taxes
(corporate income tax, VAT, excise tax, documentary stamp tax), royalties, and
regulatory fees, there are plenty of mandatory contributions and community
expenditures that a mining company must spend on. These include: (a) Annual
Environmental protection & Enhancement Program (EPEP), (b) SDMP, (c)
Community development program (CDP), (d) Environmental work program (EWP), (f)
Safety and health program, others.
Then there are mandatory environmental funds; (a)
Rehabilitation cash fund, (b) Mine monitoring trust fund, (c) Mine waste and
tailings fees reserve fund, (d) Final mine rehabilitation and decommissioning
fund, (e) Environmental trust fund, (f) Mine rehabilitation fund (MRF), others.
5. Open pit mining is very destructive and must be banned
anywere.
Wrong. It looks very destructive only in the mining
stage. After the minerals are mined out, the area is rehabilitated by covering
them with topsoil then reforested. It is happening in Rio Tuba Nickel mining in
southern Palawan and other companies.
With global cooling to follow the global warming phase,
we should expect more rains, more flooding, not less. This means we should have
more dams, lakes, and other water-impounding structures to reduce flash
flooding during heavy rains.
Some mined out open pits are better left as big wide
holes and serve as man-made lake, like Caliraya lake in Laguna. These can
create new jobs via tourism, fishing and irrigation for farms, aside from
reducing flash floods.
6. Closure of many mines means better investment environment
because the country is getting more green.
Wrong. DENR Secretary Gina Lopez’s suspensions and
closure of many firms has negative signals. There are more uncertainties in the
sector now as more regulations are added on top of existing ones, each
regulation costing money and time to comply with.
And these will eventually discourage investments and
drive away some of the large companies that want to remain honest. The
“small-scale” and illegal mining that are hardly taxed and regulated can
flourish in this environment of heavy regulation.
7. Mining is entirely useless and destructive so we should
have none of it.
Wrong. No mining, no modern life. No cars, no buses, no
airplanes, no buildings, no electricity, not even nails, hammers and big knives
to build a nipa hut or “barung-barong.”
The main purpose of government is to lay down rules that
apply to all, big and small players, and enforce the laws without any
exceptions. If government should be strict with big mining firms, then it
should be strict with small scale mines too. If government is to promote job
creation in many sectors, then government should protect jobs in compliant big
mining firms too.
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See also:
BWorld 19, Taxation and regulations in PH mining industry, September 24, 2015
BWorld 116, Urban transport myths and the jeepney strike, March 28, 2017
BWorld 117, Energy bureaucracy, electric cooperatives and NEA, March 28, 2017
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